China’s Top Airlines Bleed $1.3 Billion as Fuel Costs Surge

China’s three biggest state-owned carriers are staring at a combined loss of up to $1.3 billion for the first half of 2026, driven by a sharp spike in jet fuel prices. According to a Nikkei analysis, China Southern Airlines, Air China, and China Eastern Airlines expect losses ranging from 7.37 billion to 8.97 billion yuan — roughly $1.1 billion to $1.3 billion. The culprit: a jump in aviation kerosene costs tied to the US-Iran conflict and disruptions in petroleum supply chains.

China Southern took the hardest hit, forecasting losses between $730 million and $804 million in the second quarter alone. Company officials blamed the turmoil on geopolitical shocks. “In early March, jet fuel prices swung wildly due to the geopolitical situation, putting enormous pressure on the entire industry,” a spokesperson said. HSBC transport analyst Parash Jain warned that the “big three” face a tough third quarter, with losses likely to persist. “Given the drop in passenger traffic, which is also linked to higher fuel costs, we see limited room for near-term profit recovery,” he added.

The fuel crisis isn’t confined to China. In May, reports surfaced that India’s Air India had canceled all international flights because of soaring fuel prices, citing a broader operational meltdown. The carrier later denied the claims, calling them “false and baseless.” Still, the episode underscores how rising fuel costs are squeezing carriers across Asia — and how quickly rumors can take flight in a jittery market.